Retirement distribution planning starts with how your income sources will pay for the years ahead. “A popular rule of thumb is that you’ll need about 80% of your pre-retirement income to maintain your current lifestyle. Unfortunately, Social Security benefits supply only about half of that if you’re an average earner.” SmartAsset.com
Half of all married couples over 65 today will have a spouse that reaches the age of 95
The three legs on the stool of retirement income are pension income, social security income, and personal investment income. Not all Americans qualify for or have access to all three of these. So we as advisors usually have to make a substitution to ensure plan stability. That is why retirement distribution planning requires a comprehensive needs analysis. It lets us construct a proposal that highlights the strengths, weaknesses or limitations plan circumstances may present. As an independent RIA, we don’t have the limitations many franchise firms may have in product or investment offerings.
For an overview of every part of a retirement plan, see our retirement planning guide. We craft a prudently designed retirement income plan to client spec, with a central focus on flexibility and durability. When we partner with our clients, we have a shared interest in the longevity of their plan. We tell our clients on day one: this is a business of variables. In short, we aren’t doing our jobs if the product we provide isn’t a durable one.
One of the biggest expenses retirees don’t account for in their ladder years is healthcare costs. A retired 65-year-old couple can anticipate health care costs of $275,000 out-of-pocket, according to Fidelity Investments. Your needs will vary greatly with factors such as your state of residence, health status and family history. However, there is one constant: it is an expense that can add tremendous stress to your retirement security.
LTC costs in our home state of Connecticut are astronomical; an average of about $130,000 p/year to be exact. To add to that, only about 8% of baby boomers have purchased some kind of LTC insurance. These alarming statistics are just some of the reasons to know your options. Individuals and families may be able to mitigate this potential burden. There are many tools an advisor with advanced knowledge can present, but it’s on you to start the conversation.
Assessing risk later in life is an essential part of your retirement and estate plan. Individuals and families often need many discussions about the options available to them. For example, a comprehensive risk analysis can show our team the extent of mitigation necessary. In some cases, it can also reveal the opportunity to use advanced leveraging strategies. A skilled advisor can implement many angles and niche solutions. Still, the most important thing you can do is start a dialogue before another day or week passes. Mitigating risk only gets more expensive as you get older.
Your estate plan may revolve around creating multi-generational family wealth, or it may be philanthropic in nature. Either way, we have a solution for you. Across all of the services we provide, our policy is to educate you and your family first. That means covering the fundamentals of wealth transfer and distribution before piecing together a strategy. Estate planning is often ripe with legislative and actuarial risk. It is our job to help you make the right decisions in fulfilling your wishes both during, and after life. Make sure your estate considerations are in alignment with the rest of your plan today.
